Let’s get this out of the way. I’ve had a Payday Loan, more than one. There are those of you who know me who are probably shocked to read that. The thing is that before I was a hot mess with money-I was a hot, hot mess with money. So, I’ve made some progress.
There was a time when life happened (as it typically does) at a moment when I was completely unprepared to deal with a financial crisis. I didn’t have things to sell at home, I didn’t have a savings, and I didn’t have anyone who I could borrow from. I was working on fear and adrenaline. Fear and adrenaline are a dangerous combination like using meth and having sex-it never ends well. When life happened I decided to get a Payday loan-a decision that I learned to regret.
The thing is people getting Payday loans are by nature desperate and BROKE. There is very little possibility that they will be able to pay off the loan in two weeks when it comes due. Because they are already BROKE. Instead, most people end up paying an outrageous amount of interest two weeks later on the loan and the cycle of paying crazy amounts of interest on one teensy loan begins.
It is my belief that Payday lenders make the bulk of their money on those interest payments. The business is not motivated to wean people off of the loan and the collection tactics are pretty outrageous. When the client fails to pay the loan and I would argue that eventually many do, then the business will call the client’s place of work, etc. It becomes a frightening, scary, and rapidly out of control situation.
Let me be very clear. You should never, and I mean NEVER take out a Payday loan. Because in order to take one out you are:
- Broke
- Desperate
- Scared
- Not thinking clearly
- Don’t have people to borrow from-or other rational options
- Handing over a post dated (HOT) check
None of these things are good. It took several years, yes, years to figure out a solution to the mess that I had created. I was in an endless cycle of working low wage jobs (Colorado was in a Recession at the time) I had other financial obligations, was completely disorganized, and just in a horrible place in my life.
Let’s be clear about a couple of things, instead of getting another Payday loan I would:
- Become a freegan! I would rather rummage through trash (Whole Foods and Starbucks) and eat what was thrown out that day. Than take out another Payday loan.
- I would prefer to find a job at a waste treatment facility, cleaning out the crap pipes, then get another Payday loan.
- I would prefer crawling through poison ivy than get another Payday loan.
Can I be any clearer about how much I hate these loans? Another thing that is interesting about the Payday loan business are the business hours. The business isn’t always open at the time that you need it to be. If you are using the bus and miss the bus you’re screwed if you miss the interest due date. I do have to say that the actual clerks are quite friendly and sympathetic. They are great people persons. Probably because they have seen every manifestation of human desperation during extreme financial duress. There is nothing fast or easy about getting that cash.
Like an alcoholic I’d hit financial rock bottom. I was under so much stress that I was difficult to be around. I lost friends. I gained weight. I couldn’t focus. I was always nervous, angry, and felt like I was under constant attack by the world everyday. Part of why I blog about money is show people that it’s possible to get to the other side. That you’re not the only one out there who is struggling. I blog to illustrate that you (I) have to get control of your (my) money before it controls you. I have a long way to go so I’ll be blogging about money for awhile. I also blog because I have empathy for those of you experiencing the extreme level of fear and desperation that I did.
You are not alone.
Have faith.
Keep trying.
You can do it!
*Google pic*
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Payday loans are intense. I’m lucky I’ve never taken one. They are such a money waster.
You have to understand that in order to get one you’re pretty much financially f$cked. I don’t judge people who get them but hope that by writing how awful they are that people will be discouraged to take one and think of another option. This is why I am getting so intense about saving money for emergencies. I am sure that there were a lot of people affected about the Government Shutdown who probably took out loans. Sigh. Just avoid them, like you would avoid Meth. They are evil.
I’ve had them. I would rather sell blood, my car, or furniture. Because you’re basically loaning money to a person who is broke and won’t have the money to pay the loan back and then incurs ongoing exorbitant lending fees.